Modi Govt Decides Not To Levy Surcharge, Service Charge On Card And Digital Payments

In a move that would boost electronic payments and discourage cash payments, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the withdrawal of surcharge, service charge and convenience fee on card and digital payments.

It was also decided that above a threshold, one has to make payment online or through cards. This would also help tax authorities get leads on tax avoidance and circulation of black money.




The government will also rationalise the merchant discount rate (MDR) — the fee charged by a bank for providing debit and credit card services.

The cabinet gave its nod to creation of necessary assurance mechanisms for quick resolution of fraudulent transactions and reviewing the payments ecosystem in the country.




Several short-term (to be implemented within one year) and medium-term measures (two years) for implementation by the government ministries, departments and organisations were also approved.

Other features include introduction of formula-linked acceptance infrastructure by the stakeholders of certain card products, rationalisation of telecom service charges for digital financial transactions and promotion of mobile banking.


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